Markets fall, eurozone economy rebounds

Markets fell on Friday.

The S&P 500 fell 0.5 percent, the STOXX Europe 600 fell 0.5 percent and the Nikkei 225 plunged 1.8 percent.

A preliminary estiimate of eurozone GDP growth on Friday showed that the group grew 2 percent in the second quarter, rebounding from contractions in the prior two quarters.

Claus Vistesen, chief Europe economist at Pantheon Macro, said in a note this week that “the third quarter will be even better, as momentum carries over uninterrupted” but added that “new virus cases are now shooting higher — driven by the Delta variant — and evidence from the U.K. suggests that it is holding back economic activity”.

COVID-19 is also a concern in the US, where Brian Belski, chief investment strategist at BMO, suggested that increased concerns over the delta variant and “its potential implications for reopening momentum” seemed to have played a “key role” in market action.

Indeed, it should now be clear to the Centers for Disease Control and Prevention that vaccination alone cannot prevent the spread of the variant after a study of a sample of cases from Massachusetts showed that 74 percent of them were already fully vaccinated while four out of five hospitalisations occurred among the fully vaccinated.